Australia | Jun 23 2006
The stock hardly receives any coverage elsewhere, but analysts at Austock are of the opinion investors should take a look a retailer Clive Peeters (CPR).
Although the analysts have lowered their FY07 earnings assumptions by 4% and FY08 by 6% as NSW start up costs are expected to be higher than previously expected, on the back of hiring costs and ad spend, they have increased their valuation on the stock by 10c to $1.60.
This comes as a result of the anticipated medium term contributions from the stores they have recently acquired.
The Betta store the company acquired in Richmond is another attractive bolt-on, the analysts say, and despite the costs associated with the complete refit they forecast a 2-4% EPS uplift in FY07.
Although the NSW stores are expected to contribute little in FY07 to the electrical retailers’ earnings, the analysts point out that group sales revenue is now forecast at 45% in FY07.
In addition, the "likelihood of improved deals and rebates" should be a positive bi-product on the NSW operations, the analyst say.
As such, Austock rates the stock a Buy, with a Medium risk rating and a 12-month target of $1.60.
The stock closed yesterday at $1.435.
By Terry Hughes